Considering all of the exogenous economic and political issues facing the group, and particularly in the UK, the board feels that the overall group outcome is unlikely to be profitable in the 2018 financial year. We believe it will take the UK more than one year to recover its previous profitability at reduced revenue levels.

It would appear that projects are continuing to be postponed or cancelled on a regular basis according to the CEO in today's press.

UK staff will need to drastically be cut, to bring the cost base 20% below the forecast UK revenue, at a 120k/staff level. The concern is that it appears AUK have a low level of secured UK income in 2018, so the situation could become very serious, very quickly.

Losses in the Middle East grew from 199k in 2016, to 687k in 2017. With 115 staff in the Middle East and only 6.8m earnings in 2017, one can only deduce that without a massive cull of staff to under 60, further losses will continue to grow. The acquistions in the UAE have been a disaster for AUK, robbing the Group of cash at a time when the core UK business needed protection.

Losses in Europe continues to mount in 2017, due to inaction by the Board to complete the JV arrangements promised at the half year.

With over 1m in Debt & Overdraft, presenting an aggressive risk profile to revenue of 1:16 and rising, it is difficult to see how the position will not become more difficult for AUK as the cost reduction process mount in UK, UAE & Europe. The 2018 costs of a London office relocation will only add to the burden. All this set against a current near zero net cash position.

The Board and Directors will need to slash their rewards, and staff put onto 3 day weeks to have any chance of survival.

The CEO has bought a few additional shares as the full year figures were announced, however I suggest this was more in hope than in judgement.

My opinion is that the shares will crash back to the penny dreadful level: I am amazed it has not already happened!

Without a one-off non-reoccurring income charge to the revenue stream in 2016/17, the loss would have been significantly larger!

As I predicted earlier in the year, the AUK share price has already collapsed to multi year lows to 1.65p over the past few months, and it would appear that any upside is a long way off.

Dividends cannot be paid until the net cash position significantly improves: that appears to be a long way away!

The bank must be concerned on how their loan is going to be repaid!

The ongoing concern is that the two major markets [UK & UAE] have serious ongoing issues: Brexit [UK] & prolonged slump in Oil Prices [UAE] weighing on the economic growth outlook in both markets.

In December 2017, confidence in future architectural workloads for UK Architects had fallen to its lowest level according to the latest RIBA survey.

Clients in both locations will be reluctant to instruct projects to proceed past the planning stage. There is every chance that turnover will slide further in both markets. The competition in both markets is extreme, as £signature architects£ remain the £go-to£ appointment for the major projects. AUK is not on that list of £signature architects£!

Foster + Partners, the leading architectural £signature£ competitor, are rolling along at 20% profit, with the 10 directors receiving 1m pa each!

The key KPI £Turnover/Employee£ is 160k pa, twice that of AUK. 7m has been distributed this year to key F+P staff as bonuses!

Aukett Architectural Fee Earning Directors are on minimal reward: less than 10% of Foster+Partners.

The key KPI £Turnover/Employee£ is a mere 60k pa, less than 40% of the leading competitor.

Aukett S****e [AUK] has announced a project gain in Dubai. It is basically a big shed for Lesso!

Be careful guys: AUK half year results showed an underlying $1m loss position for 2016/17, with cash draining very quickly.

Lesso is a Chinese industrial group of home building materials, selling poor quality, poorly designed, Chinese interior building products. They buy low cost Chinese home building materials and are trying to sell them internationally through large shed buildings.

AUK continues to £buy£ low grade work. It is clear that Lesso buys the cheapest that is offered to them. AUK has most probably offered the Chinese a fee deal that even they could not resist!

Hard to see how this cannot be AUK desperately buying £zero profit£ workload to prop up their poor, low grade Middle East acquisition.

AUK£s £1m Debt to prop up these low grade UAE acquistions, might be considered an aggressive risk position with £revenue : debt£ ratio @ 16, so be careful!

The key KPI £Turnover/Employee£ is a mere £80k pa at AUK, less than 50% of the leading competitor.

Dividends cannot be paid until the net cash position significantly improves: that appears to be a long way away!

AUK continues to suffer from poor management, poor decisions, low fees, inefficient staffing levels, poorly run and unprofitable projects, multiple small under performing offices, high non-architectural staff wages [too many accountants!], and retention of high quality senior architectural staff not being rewarded resulting in low moral and departures.

Shares traded at 1.65p at their lowest: shares continue to drag along at 30 year lows......

and congrats to the guy/gal who got the 2.044 first thing this morning which was the same as last night by the looks, I called a quote up and was offered it but thought I'd typed in summat wrong so didnt accept it, next quote was 2.6p and opportunity lost.Who says mms dont make mistakes eh ?

As AUK Year End approaches, shares have traded down to the 2p level as anticipated.

Considering the half year results issued earlier, it would appear that without the ‘Windfall Gain’ listed within page 13 of the half year statement relating to ‘Non Recurring Income’ of 0.65m [Fair value gain on the reduction of deferred consideration + Gain recognised on acquisition settlement], the true loss for the half year would have blown out to c.1.0m.

Without a significant turn around in income in the second half, a sizeable loss might be the outcome for the second half, with the knock effect of wiping out all ‘net funds’. AUK will then be relying on bank borrowings.

More troubling is the fact that AUK are reporting to be holding 400 employees, with an annualised net fee income [excl.consultants] of only c.16m pa, representing a KPI of 40k/staff. The two highest paid employees appear to be accountants, and they are at c.200k/year!

Fosters + Partners, the main UK competitor, are delivering 225m revenue with 1265 staff, representing a KPI of 178k/staff, 4.4x better than AUK!! Fosters have their 10 architectural directors earning on average 600k/year, before the distribution of EBITBA of 35.5m to shareholders.

Most other UK Architectural practices are in constant profit with Chapman Taylor at 8% and Grimshaw at 6%. These companies are run by architects! Directors salaries are also much, much higher!

Dividends will not emerge from AUK until they start clearing the debt and start delivering regular 10-15% profit margins. Currently they are in a potential substantial loss position, unless revenue increases fast. Cutting the cost base does not seem to be on the agenda, as they are constantly stating they are ‘protecting the core’? Sounds like the ‘core’ needs to be drastically reduced to 90 FTE to match the declining revenue stream and Fosters KPI of 178k/staff.

If this full year loss outcome emerges, and 'net funds' exhausted, I expect the share price to be below 2p, and threaten multi year lows. If AUK does not reduce their headcount below the revenue base, an even worse outcome might follow…..

Aukett S****e Group Plc, the international practice of architects and interior design specialists and engineers, is pleased to announce its interim results for the six month period ended 31 March 2017.

Highlights• Revenues down 9% at £9.1m• Net cash at £1.56m with net funds of £594k• Loss before tax of £358k

"All Group operations have worked hard to maintain revenues during the period although some markets have continued to weaken, resulting in decreased earnings. This coupled with some specific write downs offset by claim recoveries, has resulted in losses which has hampered the development of our three hub structure. We are, however, pleased to report that we have maintained our liquidity strength." Overall we currently foresee a loss situation for the year pending a return to positive results for our Group.”

UK GDP set to drop to 1.5% over the next two years. Service Sector is in sharp decline in last 3 months. 50% of AUK Group Income from UK, dropping from 65% in 2016: now heavily constrained by Brexit, UK Political Uncertainty, and UK Terrorist Attacks. Volatile National UK Mood.

International operations spread across volatile, challenging geographies, with low fees, and bad debt provisions, incl. Middle East, Russia & Turkey. 45% of AUK Group Income from UAE, now constrained in UAE by over supply of office accommodation, and major retail and hospitality schemes coming on stream. Signature Architects taking the quality projects. Fosters + Partners [F+P] opened Dubai Office in 2017: a substantial high quality signature competitor. F+P £57m Middle East Fees in 2016.

AUK has chased typically low margin design work with low fees and small marginsResults continue to be very poorPoor Earnings per FTE @ £83k in 2016 [£18.4/220 FTE]; 2017 looks even worse!Ongoing Poor/No Profitability compared with other Architects, eg. Foster+Partners at 27- 30% profit in 2016.AUK had one client who delivered 20% of UK workload in 2016 [£2.25m] – this may not be repeatable in the years ahead, requiring more projects to fill this gap. 30% decline year on year decline in UK.

Serial history of disappointing, lackluster, and lumpy tradingCEO gifting shares to family as presents Micro-cap: very, very low share tradingRisk of delisting: why do AUK bother?Chance of Delin

350k outgoings per week, leaves AUK with Net Funds of less than 2 weeks outgoings.

No mention of projected full year numbers, but with Brexit in full swing, AUK’s main source of revenue from the UK [65% of group income] will be under considerable strain.

UAE High End Office rentals forecast to fall as current office projects are being completed in 2017. Hard to see where the normal commercial AUK work will come from in the UAE. Business Bay just completed, and the other large projects in Abu Dhabi already have signature architects appointed. In retail, Mall of the World and Yas Island Development architects already in position. Large hotel projects Al Habtoor City, Jewel of the Creek, Paramount and Viceroy also already have architects engaged. AUK up against world class signature architects…..will they be able to attract clients?

Predictions of a Loss for Full Year, Net Cash back to zero, More Staff Reduction costs to come?

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